Samsung Electronics is in talks to acquire Modine Manufacturing, a maker of cooling systems for data centres, according to people familiar with the matter. The companies could reach a transaction as soon as the coming weeks, though no final decision has been made and the talks could still fall apart. Another suitor could also emerge, the people said. Representatives for Samsung and Modine declined to comment.

Modine's shares closed regular trading in New York at $106.10, giving the company a market value of about $5.6 billion, and rose to more than $135 in late trading, a gain of 28%. The stock had fallen about 15% since November 3, when quarterly results underwhelmed investors. Samsung rose as much as 3.9% in Seoul before paring gains, and its shares have surged 72% this year, giving it a market value of about $910 billion.S1

Analysts say a deal would help Samsung diversify beyond its memory chip business. Bloomberg Intelligence analyst Masahiro Wakasugi said the group, while generating large cash from chips, may need other growth businesses such as data center-related assets. The talks reflect a wider push by US and overseas companies, including Daikin Industries, LG Electronics and Vertiv Holdings, to capture growth from data centres through bigger investments and dealmaking.S1

Based in Racine, Wisconsin, Modine makes heavy duty cooling and heating systems for large commercial buildings and industrial machines, and its fastest-growing business serves hyperscalers that build data centres. In October it spun off its automotive business to focus on thermal management. Bloomberg Intelligence analyst Christina Feehery said the unit has grown 86% annually over the past three fiscal years and has significant upside in data centre cooling.S1

Samsung has already been expanding its thermal solutions offering for data centres through international acquisitions, including its purchase last year of Germany-based FläktGroup Holding for €1.5 billion ($1.7 billion). A Modine takeover would be bolder in magnitude.S1